Chiang Mai, Thailand

More than 120,000 Cambodians have fled Thailand to return home in the past week, fearing a crackdown on migrant workers after last month’s military takeover, an official said on Sunday.

The mass exodus of labourers – who play a key role in Thai industries such as seafood and agriculture but often lack official work permits – comes amid a junta warning of arrest and deportation for illegal foreign workers.

“They’re returning en masse like a dam collapsing. They’ve never come en masse like this before in our history,” Kor Sam Saroeut, governor of the northwestern province of Banteay Meanchey where the main border crossing is located, told AFP by telephone.

Around 122,000 Cambodian migrants have returned from Thailand in the last week after being transported to the border by Thai military trucks or making their own way, he said late Sunday.

“They said they are scared of being arrested or shot if they run when Thai authorities check their houses,” Saroeut added. “Most of them went to work in Thailand without a work permit.”

But two days later the Thai foreign ministry dismissed “RUMOURS” the army was deporting Cambodian labourers and later Sunday released a new statement citing spokesman Sek Wannamethee as saying: “No crackdown order targeting Cambodian workers had been issued by the NCPO (junta body).”

As a result of the rumours, “Cambodian illegal workers have reported themselves to the Thai authorities for being repatriated voluntarily to Cambodia,” the statement said, adding that Thai immigration officials had provided transport for them. (NOT RUMOR!)

More than 12,000 migrant workers crossed the border into Cambodia on Sunday alone, according to Saroeut, who expects many more to make the journey over the new few days.

Thousands were sheltering from the rain at local Buddhist temples and a market as they waited for transport to their home provinces.

Cambodian authorities have arranged nearly 300 cars and military trucks to ferry workers home from the Aranyaprathet-Poipet border checkpoint but many would have to stay near the site overnight until transport became available, Saroeut said.

At the smaller border checkpoint of Boeung Trakuon, south of Poipet, around 1,000 Cambodian men and women walked across the border with heavy bags and children in tow, said a local journalist.

Sirichan Ngathong, a spokeswoman for Thailand’s army which seized power in a coup on May 22, had said Wednesday the junta viewed illegal migrants as a “threat” and they faced arrest and deportation.

The Sathorn Unique was once slated to be a glistening, stunning addition to the Bangkok skyline during Thailand’s economic boom in the 1990s. But in 1997, the Asian financial crisis left no money to complete to building.

Today, the eerie, unfinished 49-story “ghost tower” is a very different kind of attraction.

While entering the building is forbidden, viewing it from afar is still a creepy experience. The gray tower stands empty and desolate — its incomplete upper levels beg you to wonder what’s up there.

Locals are convinced the building is haunted, and just from looking at the pictures below you can understand why.

‘Teflon’ Thailand is well known as one of the fastest-growing economies in Asia, but that growth seems to be slowing down now that the country has been plagued with protests which have been aired in an international arena SINCE November 2013.

Reports show that the economy has grown in the last quarter at the slowest pace in almost two years, which is mostly due to the declining tourism and lack of local demand caused by the political unrest.

Foreign investors are believed to be shying away from the Kingdom as well – foreign direct investment reached almost 13 billion US Dollars in 2013, but is estimated to drop to less than 8 billion in 2014. Thailand has managed to stand out in Southeast Asia to investors due to its large market of 70 million people, a strong and growing middle class, a pro-business attitude, sufficient supported infrastructure and numerous geographical advantages.

However, investors are now looking at other emerging markets, such as Indonesia, whose population is currently 246 million people. While Thailand will still remain a good place for long-term investment, new investors might be put off by the country’s current political woes.

Thailand’s state planning agency announced the GDP growth forecast for 2014 was cut to 3% – 4% while it used to be in the range of 4% – 5% before the political strife.

Thailand is part of the overall emerging markets bubble that I have been warning about in recent years, along with Indonesia, Malaysia and other Southeast Asian countries.

The emerging markets bubble started in 2009, when China launched a bold stimulus-driven economic growth strategy to counter the deleterious effects of the global financial crisis on its economy. China immediately scrambled to construct scores of new cities (many of which are still empty) and ambitious infrastructure projects for the sake of generating economic growth, which sparked a global raw materials boom that benefited commodities exporters such as emerging market nations and Australia. Global investors soon began to pile into emerging market investments to diversify away from ailing Western nations in wake of the financial crisis.

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As international capital clamored into Thai assets, the country’s 10 year government bond yields fell from their prior 4 to 6.5 percent range to just over 3 percent, while total external debt more than DOUBLE.

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Even more worrisome is the fact that Thailand’s short-term debt to total external debt ratio has roughly doubled in the past decade, which means that the country is more vulnerable to short-term interest rate increases.

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In March 2013, Virabongsa Ramangkura, chairman of the Bank of Thailand, warned about the risk of “hot money” capital inflows inflating a bubble in Thailand’s economy. “Foreign money flows in because of the higher interest rate. If a bubble bursts, everything that we see as good will come to an end or will not happen.”

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As with most other emerging market nations, Thailand is currently experiencing a dangerous credit bubble that is helping to boost its economic growth and consumer spending. Though traditionally an export-driven economy, debt-funded domestic demand has replaced the country’s export sector as the primary economic growth engine since 2008.

Loans to Thailand’s private sector have soared by over 50 percent since the start of 2010.

The government move to force the central bank to print money for paying off public debt would reduce banknotes to worthless paper, the opposition warned yesterday.

The government has cut Bt43.43 billion from some projects and used the funds to finance other projects, including water-resource management, transport projects and supporting villages and local governments, Deputy Prime Minister Kittiratt Na-Ranong said yesterday. He was speaking during the second reading in Parliament of the 2012 Budget Bill, with proposed government spending of Bt2.38 trillion, and a deficit of Bt400 billion.

Opposition leader Abhisit Vejjajiva criticised the government expenditure plan for fiscal 2012 for not responding to the needs of flood victims. He said the government had not cut unnecessary spending and was not focusing on the much-needed areas. He also vowed to petition the Constitution Court if the government issues an emergency decree to borrow funds without proper reasons.

During the debate, Democrat MP Sansern Samalapa charged: “The government’s plan to force the central bank to repay the debts of the Financial Institution Development Fund would result in the printing of more money for the government.”